Corporate responsibility in spotlight

If you make up the rules, you’ve got an excellent chance of winning the game.

That seems to be the logic behind a recent government initiative to study international standards on what is still unfamiliar territory for many businesses here — corporate social responsibility.

The Ministry of Economy, Trade and Industry will set up a working group May 27 to study CSR standards, as the Geneva-based International Organization for Standardization steps up efforts to create a new standard for gauging corporate social responsibility by around 2005.

By the end of this year the working group plans to come up with proposals for the ISO, according to the ministry.

In Japan, the term CSR is still often unrecognized, although it is gaining wider acceptance. A series of corporate scandals over the past few years — including those involving Nippon Meat Packers Inc., the Snow Brand group and Tokyo Electric Power Co. — have alerted companies of the need to incorporate CSR into their daily operations.

While the definition of CSR is not clear-cut, it refers to such activities as complying with laws, maintaining good relations with employees, customers and the community and conducting business in an ethical and equitable manner.

The new working group will be made up of around 10 experts, with Iwao Taka, a Reitaku University professor and pioneer in corporate ethics research, serving as its chairman.

“Rules are very important,” said a METI official in charge of standards development and planning, adding that Japan has so far only reacted to the ISO’s standard-making processes. “This time, we are trying to put our own ideas forward.”

Eiichiro Adachi, senior researcher at the Japan Research Institute, said that the ISO’s plans to create a CSR standard reflect European nations’ growing tendency to place increased value on legal and ethical questions surrounding the manufacturing of products.

The idea is to make more companies aware of the various needs of society, such as environment-friendliness or human rights protection, rather than merely seeking profits.

But some observers have voiced concerns about the creation of a unified standard for social responsibility, saying it could give companies the erroneous perception that they will be free to do whatever they want once they have cleared the CSR standard.

The ISO, a nongovernmental organization started in 1947 to promote international standardization in electronics fields, now comprises member organizations, such as business groups, from 146 countries. ISO standardization covers a variety of products and services for quality control, ranging from screws, films and cars to, more recently, business management.